Oil prices drop as falling drilling activity fails to dent US inventory buildup
Oil prices drop as falling drilling activity fails to dent US inventory buildup.Reuters

Oil prices declined further after Saudi Arabia's oil minister said it is not the sole responsibility of Opec to raise oil prices in further indication that the biggest oil exporter has no plans to reduce oil production.

Despite the decline in oil prices by a half since June 2014, the cartel was not ready to cut production, fearing that would lower the group's market share. Opec leader Saudi Arabia has been insisting that non-Opec members cooperate with the group and prop up oil prices.

However, non-Opec members are yet to go along with the plan, according to Saudi oil minister Ali al-Naimi.

"Today the situation is hard. We tried, we held meetings and we did not succeed because countries (outside OPEC) were insisting that OPEC carry the burden and we refuse that OPEC bears the responsibility," Naimi was quoted as saying to reporters on the sidelines of an energy conference in Riyadh.

"The production of OPEC is 30 percent of the market, 70 percent from non-OPEC...everybody is supposed to participate if we want to improve prices."

Saudi Arabia's Opec governor Mohammed al-Madi earlier said it would be hard for oil to reach $100-$120 per barrel again.

Following the comments, oil prices declined sharply. WTI crude futures are trading down 1.16% at $46.03 as at 11.59pm ET. Brent crude is down 0.76% at $54.90.

Following a short-lived rise to $60s earlier, oil prices fell sharply as crude stocks in the US rose to new record levels in addition to more oil supply from Iraq to global market.

According to loading data and Reuters, oil exports from the south of Iraq totalled 2.66 million barrels per day in the first 18 days of the current month and as such are only slightly below the record level achieved in December. In addition, exports from the north of Iraq totalled 290,000 barrels per day in the first ten days of March.

Naimi added that politics played no role in the kingdom's oil policy.

"There is no conspiracy and we tried to correct all the things that have been said but nobody listens," he said.

"We are not against anybody, we are with whoever wants to maintain market stability and the balance between supply and demand, and (with regards to) price the market decides it."